Financial Data and Key Metrics Changes - The company reported record revenue of over $128 million, an increase of 11.9% year-over-year [5][17] - Pretax income grew by 30.6% to nearly $20 million, with an EPS increase of 42.7% to $1.17 [5][20] - The pretax margin rate for Q1 was 15%, compared to 3% in Q1 2019, indicating significant improvement [5][6] Business Line Data and Key Metrics Changes - Net retail sales increased by 10.9% to $119.6 million, with strong performance across all segments [17] - E-commerce demand rose by 5%, while commercial revenue, primarily from wholesale sales, grew by 28.3% [19] - The Mini Beans collectibles line expanded by 30% year-over-year, with total sales reaching nearly 2 million units [13] Market Data and Key Metrics Changes - Domestic store traffic increased by 3%, significantly outperforming the U.S. national traffic, which declined by 3% [18][45] - The company ended the quarter with over 600 locations, with 30% of these outside the United States [8] Company Strategy and Development Direction - The company is focused on three strategic initiatives: expanding experiential retail, advancing digital transformation, and leveraging brand strength through investments [7][12] - Plans include opening at least 50 net new locations in 2025, primarily operated by international partners [22][11] - The company aims to maintain its revenue guidance while updating pretax income guidance to a range of $61 million to $67 million, inclusive of current tariff rates [23][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic and geopolitical challenges, citing a clean balance sheet and strong cash flow [6][15] - The company anticipates continued momentum into Q2 and robust plans for the remainder of 2025, expecting record revenue and strong profitability [15][25] Other Important Information - The company returned over $7 million in capital to shareholders during the quarter [5][17] - Inventory at quarter-end was $72.3 million, reflecting an increase due to accelerated purchases of core products [21] Q&A Session Summary Question: How will the company capitalize on movie-related events? - The company maintains strong relationships with major film creators and has evolved its product lines to appeal to a broader audience, including collectible items for teens and adults [32][34] Question: How will the new inventory management system improve responsiveness to trends? - The new system will enhance inventory visibility and allow for better management of stock levels, enabling the company to respond more effectively to trends [36][37] Question: How did the company’s operated stores perform compared to expectations? - The company reported positive performance across all metrics, with traffic up 3% and conversion rates improving, indicating successful execution of marketing strategies [44][45] Question: Who are the partners for operated stores and are there plans for more? - The company partners with well-known firms in various markets, ensuring they can deliver the Build A Bear experience effectively [48][49] Question: What is the impact of tariffs on the updated guidance? - The updated pretax income guidance reflects less than $10 million in tariff impacts, with ongoing efforts to mitigate costs through diversified sourcing [60][61]

Financial Performance & Growth - Build-A-Bear's total revenue reached $496 million in 2024, a 47% increase compared to 2019 [16] - Net retail sales amounted to $460 million in 2024, reflecting a 42% growth since 2019 [16] - Third-party revenue (Commercial + International Franchise) surged to $36 million in 2024, a 140% increase from 2019 [16] - EBITDA reached $81 million in 2024, a substantial 430% increase compared to 2019 [16] - Free Cash Flow (FCF) was $28 million in 2024, showing a 199% increase from 2019 [16] - The company's Return on Invested Capital (ROIC) was 33% in 2024 [16] Business Diversification & Expansion - Approximately 40% of sales are attributed to teens and adults [20] - Web Demand has grown by approximately 110% from 2019 to 2024 [20] - Build-A-Bear has expanded to 369 corporate stores and 235 third-party stores across multiple formats in 30 countries as of Q1 2025 [23] Store Performance - Discovery store model averages $1578K in store unit volume with a 4-Wall EBITDA of $535K and a 34% margin [55] - Concourse/SIS store model averages $615K in store unit volume with a 4-Wall EBITDA of $152K and a 25% margin [55] Systemwide Sales - Systemwide sales reached $5481 million in 2024 [94]

Core Insights - Build-A-Bear (BBW) reported quarterly earnings of $1.17 per share, exceeding the Zacks Consensus Estimate of $0.86 per share, and up from $0.82 per share a year ago, representing a 36.05% earnings surprise [1] - The company achieved revenues of $128.4 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 8.86% and increasing from $114.73 million year-over-year [2] - Build-A-Bear has outperformed consensus EPS estimates three times in the last four quarters and has topped revenue estimates four times in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.63 on revenues of $115.21 million, while for the current fiscal year, the estimate is $3.88 on revenues of $511.2 million [7] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Retail - Miscellaneous industry, to which Build-A-Bear belongs, is currently ranked in the top 14% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Financial Performance - Total revenues for Q1 fiscal 2025 reached a record $128.4 million, an increase of 11.9% compared to the same period last year[3] - Pre-tax income for the quarter was a record $19.6 million, reflecting a year-over-year increase of 30.6%[4] - Diluted earnings per share (EPS) increased by 42.7% to $1.17, driven by higher pre-tax income and a reduced share count[10] - Net retail sales amounted to $119.6 million, up 10.9%, while consolidated e-commerce demand grew by 0.5%[4] - EBITDA for the 13 weeks ended May 3, 2025, was $23,131 thousand, compared to $18,261 thousand for the same period in 2024, reflecting a year-over-year increase of 26.5%[30] - Retail gross margin for the 13 weeks ended May 3, 2025, was $68,018 thousand, a 16.5% increase from $58,453 thousand for the same period in 2024, resulting in a gross margin percentage of 56.9%[27] Shareholder Returns - The company returned $7.1 million to shareholders through share repurchases and dividends, with $44.3 million in cash at the end of the quarter[3] Future Guidance - The company expects total revenues to grow on a mid-single-digit percentage basis for fiscal 2025[11] - Pre-tax income guidance for fiscal 2025 is updated to a range of $61 million to $67 million[11] Growth and Expansion - The company had net new unit growth of 15 global experience locations, bringing the total to 604 locations[5] - The number of corporately-managed retail locations increased to 369 in May 2025, up from 357 in May 2024, indicating a growth of 3.4%[27] - The number of franchised stores increased to 87 in May 2025, compared to 77 in May 2024, reflecting a growth of 13.0%[27] Inventory and Assets - Inventory at the end of the quarter was $72.3 million, an increase of 12.9% year-over-year[7] - Total assets increased to $308,303 thousand in May 2025, up from $289,956 thousand in February 2025, representing a growth of 4.6%[25] Capital Expenditures - Capital expenditures for the quarter totaled $2.9 million, compared to $2.4 million in the previous year[8] - Capital expenditures for the 13 weeks ended May 3, 2025, were $2,907 thousand, an increase from $2,430 thousand in the same period of 2024, marking a rise of 19.6%[27] Liabilities and Equity - Total current liabilities increased to $85,351 thousand in May 2025, up from $79,394 thousand in February 2025, representing a rise of 7.4%[25] - The total stockholders' equity increased to $148,682 thousand in May 2025, up from $139,082 thousand in February 2025, representing a growth of 6.0%[25] - Retained earnings rose to $98,243 thousand in May 2025, compared to $89,516 thousand in February 2025, showing an increase of 9.7%[25] Operating Assets - Operating lease right-of-use asset increased to $92,699 thousand in May 2025, compared to $90,200 thousand in February 2025, indicating a growth of 2.8%[25]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Build-A-Bear (BBW) driven by higher revenues, with the actual results being crucial for stock price movement [1][2]. Earnings Expectations - The earnings report is expected on May 29, 2025, with a consensus EPS estimate of $0.86, reflecting a +4.9% change year-over-year, and revenues projected at $117.95 million, up 2.8% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised 1.61% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows a positive Earnings ESP of +0.97% for Build-A-Bear, suggesting a likelihood of beating the consensus EPS estimate [10][11]. Historical Performance - In the last reported quarter, Build-A-Bear exceeded the expected EPS of $1.52 by delivering $1.59, resulting in a surprise of +4.61%. Over the last four quarters, the company has beaten consensus EPS estimates twice [12][13]. Conclusion - Build-A-Bear is positioned as a compelling candidate for an earnings beat, but investors should consider other influencing factors before making investment decisions [16].

Core Viewpoint - Build-A-Bear (BBW) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, continuing a strong trend of surpassing expectations in previous quarters [1][6]. Earnings Performance - Build-A-Bear has consistently exceeded earnings estimates, with an average surprise of 4.45% over the last two quarters [2]. - In the last reported quarter, the company achieved earnings of $1.59 per share, surpassing the Zacks Consensus Estimate of $1.52 per share by 4.61% [3]. - In the previous quarter, Build-A-Bear reported earnings of $0.73 per share against an expectation of $0.70 per share, resulting in a surprise of 4.29% [3]. Earnings Estimates and Predictions - Recent estimates for Build-A-Bear have been revised upwards, indicating a positive outlook for the company's earnings [6]. - The Zacks Earnings ESP for Build-A-Bear is currently +0.97%, suggesting that analysts are optimistic about the company's earnings prospects [9]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) indicates a high likelihood of another earnings beat [9]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [7]. - The Earnings ESP metric compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [8].

Company Overview - Build-A-Bear Workshop, Inc. (NYSE: BBW) is a specialty retail store primarily focused on selling children's plush toys [1] - The company differentiates itself by emphasizing in-store customer experience and fostering emotional connections with customers rather than just selling products [1] Investment Strategy - The focus is on identifying strong companies that are undervalued by the stock market, with the belief that corrective forces will realign these "mispriced" stocks to their intrinsic value [1] - Corrective forces may include activist investors' proxy fights, leadership and strategic changes, spin-offs, and industry cyclicality [1] - The objective is to identify these opportunities before they materialize, as stock return overperformance is expected from such investments [1]

Retail Expansion - In fiscal 2024, the company opened a net of 64 new Build-A-Bear Workshop retail experience locations, with expectations of at least 50 new locations in fiscal 2025[26]. - The company has shifted to non-traditional retail locations, with over a third of total stores now in such settings, including family-centric tourist sites[26]. - The company’s retail stores also function as mini distribution centers, facilitating efficient fulfillment of digital demand through programs like "Buy Online, Ship From Store"[34]. Digital Transformation - The company has accelerated its digital transformation initiatives, enhancing marketing and loyalty programs to increase consumer engagement and expand its total addressable market[26]. Financial Performance - The company’s cash flows have improved significantly, allowing for increased support for key initiatives and returning capital to shareholders through dividends and share repurchases[26]. - The company’s operating margins have remained robust despite inflationary pressures, allowing for disciplined expense management and continued investment in growth initiatives[26]. Inventory and Currency Risk - As of February 1, 2025, the company's inventory balance was $69.8 million, an increase of $6.3 million compared to February 3, 2024[30]. - The company purchases all inventory in U.S. dollars, exposing it to currency risk from fluctuations in foreign currencies[237]. - A hypothetical 10% decrease in current foreign currency exchange rates would not have a material effect on the company's financial position or results of operations[238]. - Foreign currency transaction gains and losses have not been material to the company's financial statements to date[238]. - The company does not have a formal hedging program with respect to foreign currency[238]. - International sales are primarily denominated in Canadian dollars, Euros, and British pounds, which may affect pricing and revenue[237]. - The company’s foreign subsidiaries buy inventory in their functional currency, which can increase costs if their currencies depreciate against the U.S. dollar[237]. - Translation adjustments from foreign operations are reported in accumulated other comprehensive income[238]. - The company’s financial results are reported in U.S. dollars, which may be impacted by changes in currency exchange rates[236]. Employee Information - The company employs approximately 1,000 full-time and 4,100 part-time employees across the U.S., Canada, the UK, and the Republic of Ireland as of February 1, 2025[35]. Licensing and Brand Relationships - The company has developed licensing relationships with major brands such as Disney, NBCUniversal, and Pokémon to enhance its product offerings and marketing opportunities[49]. - The company’s strategic focus includes expanding product offerings and licensing relationships to drive retail performance and leverage brand equity[25]. Regulatory Compliance - The company is subject to the reporting requirements of the Securities Exchange Act of 1934 and files periodic reports with the SEC[50]. Risk Factors - For detailed risk factors that could affect results, refer to "ITEM 1A. RISK FACTORS" in the Annual Report[239].

Core Viewpoint - The article emphasizes the importance of value investing and highlights BuildABear Workshop (BBW) as a strong value stock based on its financial metrics and Zacks Rank system [2][4][7] Valuation Metrics - BBW has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating it is a high-quality value stock [4] - The current P/E ratio of BBW is 9.20, significantly lower than the industry average of 14.83, suggesting it may be undervalued [4] - BBW's P/B ratio stands at 3.86, compared to the industry average of 11.13, further indicating solid valuation [5] - The P/CF ratio for BBW is 7.37, which is attractive relative to the industry's average of 15.51, reinforcing the notion of undervaluation [6] Historical Performance - Over the past year, BBW's Forward P/E has fluctuated between a high of 12.41 and a low of 6.38, with a median of 9.02 [4] - The P/B ratio for BBW has ranged from a high of 5.04 to a low of 2.63, with a median of 3.76 [5] - BBW's P/CF ratio has varied between a high of 9.56 and a low of 5.17, with a median of 7.21 [6] Conclusion - The combination of BBW's strong earnings outlook and favorable valuation metrics suggests it is currently an impressive value stock [7]

Group 1 - The article highlights that investors may not be focusing on the Consumer Discretionary sector, particularly Build-A-Bear Workshop, Inc. (NYSE: BBW), due to rising economic uncertainty [1] Group 2 - The author expresses a personal investment strategy focused on dividend investing in quality blue-chip stocks, BDCs, and REITs, aiming to build a portfolio that supports retirement income [2] - The article emphasizes the importance of conducting due diligence for investors and encourages building investment portfolios of high-quality, dividend-paying companies [2] Group 3 - The author has a beneficial long position in BBW shares, indicating a personal investment interest in the company [3] - The article does not provide specific investment recommendations or advice, emphasizing that past performance is not indicative of future results [4]